(Originally posted on January 5, 2016)

 

Tax Time Tips Prepare Now, Save Later!

 

Yes, it is time to start thinking about your taxes again! Following are some tips to help you to minimize your family tax burden:

  1. 1. Be organized; keeping your receipts in a safe place will ensure you get all of the deductions and credits you are entitled to. A small lost receipt for Daycare, medical, children’s fitness etc. could cost you tax dollars
  2. 2. Contribute to RRSP’s; every dollar you invest could save you up to $40 in income tax. Additionally, interest earned while in the RRSP is tax-deferred
  3. 3. Know what you can claim; get a FREE tax checklist from your Ledgers Professional. You may be discarding receipts and other items that could save you on tax. Do you have employment expenses? Have you paid for Financial Planning advice?
  4. 4. If you have a spouse, prepare your returns together; some credits and deductions can be transferred to the other person to best optimize the tax benefits. See also Point #8.
  5. 5. Ask your employer to provide you with Taxable Benefits instead of a salary increase; there can be significant tax savings. Having your employer contribute to your RRSP or pay for your daycare, transit passes etc. can save you a great deal.
  6. 6. Operate a home-based business; make some of your living expenses tax-deductible. Making your mortgage tax-deductible has huge tax advantages
  7. 7. If you provide care for your elderly parents or disabled children, you may be able to make a claim for Caregiver credits. Caring for the elderly or disabled can be very costly, make sure to file a proper, complete claim.
  8. 8. Pooling Receipts for Medical Expenses and Charitable Donations between family members can save significant tax dollars. See also Point #4.
  9. 9. Spousal RRSP’s can save you thousands of dollars in taxes upon retirement; plan wisely. Transferring taxable income in retirement to a lower-income spouse has huge tax advantages.
  10. 10. Invest in RESP’s if you have young children; the government will match some of your contributions and the interest earned is tax- deferred and transferred to your children. Free Money! What more do we need to say here?
  11. 11. Do not believe what your ‘neighbour’ says; you should only be getting advice from a Tax Professional. Too many people believe they know the Tax Act, when in fact, a lot of misunderstanding exists and CRA does not like folklore.
  12. 12. Invest in a professionally prepared Financial Plan; until you determine your life goals, it is difficult if not impossible to do proper tax planning. Only a Professionally prepared financial plan can provide you with the guidance you need to plan for your personal financial comfort and future plans.


Of course, not all of these options will be available to everyone, but make sure you have your Personal Taxes filed by a Tax Professional and be certain to discuss with them ALL of the details of your personal financial situation to ensure you are getting proper advice and tax planning.